Former Ultrasystems Official Accused by SEC

The Securities and Exchange Commission Thursday accused a former Ultrasystems executive of insider trading shortly before Hadson Corp. announced that it was buying the Irvine engineering concern in 1987.

The executive, Gerald A. Horwitz, consented to give up $1,700 in profits and pay a fine of $1,400, the commission said. Without admitting guilt, Horwitz also agreed not to violate insider trading laws.

Horwitz is the second Ultrasystems executive to be charged with insider trading relating to the merger with Hanson.

Horwitz was vice president of an Ultrasystems’ defense and space unit in October, 1987, when the merger was first proposed. The commission said Horwitz is now a vice president and general manager of another, unnamed public company.

Hadson, an Oklahoma City producer of natural gas, completed its acquisition of Ultrasystems for $85 million in April. Hadson said the transaction made the company the nation’s largest independent gas and electric company. Ultrasystems is involved in engineering and construction of alternative energy systems, such as wood-burning power plants.

The SEC earlier this month accused another Ultrasystems executive, Dennis W. Evans of Mission Viejo, of insider trading.

At that time, the company said Evans would remain controller of an Irvine subsidiary pending his SEC civil trial. The SEC accused Evans of using insider information to make $11,000 in the stock market for himself, his mother-in-law and a friend.

The company wouldn’t comment on either Evans or Horwitz Thursday.

In the case of Horwitz, the SEC said he learned about the pending acquisition at an executive staff meeting of an Ultrasystems’ subsidiary--Ultrasystems Defense & Space Inc.--in October, 1987.

At that meeting the company’s chief executive officer told Horwitz and other executives that Ultrasystems was talking with Hadson, the SEC said. The CEO told the officials that the information should not be disclosed to anyone outside the meeting.

Horwitz then bought 1,000 shares of Ultrasystems and recommended to a relative--who was not sued or named by the SEC--that she buy stock, the SEC said. She bought 200 shares.

Eight days after the meeting, the two companies announced their boards had approved the deal. That day the stock rose $2,875.

The proposed settlement must be approved by a federal judge, usually a formality. Horwitz, a Long Beach resident, could not be reached for comment.